Creditor-Debtor Law

Joint Obligations – Fair Share – Contribution

BMO Harris Bank N.A. v. European Motor Works, 2016 WI App 91 (filed 8 Nov. 2016) (ordered published 21 Dec. 2016)

HOLDING: In a debt action involving owners of a limited liability company (LLC), the trial court properly dismissed one owner’s contribution claim against the other regarding a settlement payment.

SUMMARY: Smith and Kleynerman each owned 50 percent of their business, an LLC known as European Motor Works (EMW). Both executed a large promissory note issued by a bank and each one assumed personal liability for the debt. The note also provided that EMW would pay legal fees in the event of default. EMW defaulted, and the bank sued both Smith and Kleynerman; Smith cross-claimed for contribution against Kleynerman. Smith eventually settled with the bank for nearly $240,000; Kleynerman, who was bankrupt, later settled for $10,000. As to the contribution claim, the trial judge ruled that Smith’s settlement had not conferred any “benefit” to Kleynerman, and thus it dismissed the claim.

The court of appeals affirmed in part and reversed in part in an opinion authored by Judge Curley. Smith and Kleynerman were liable for the same debt. Properly analyzed, the issue was not one of “benefits conferred” but whether Smith paid more than his “fair share” (¶ 23). And “the proper analysis under these circumstances is based upon the total outstanding obligation rather than the total amount paid to settle the obligation” (¶ 24).

Based on persuasive case law, the court held that “where two or more parties are liable for the same obligation and each party obtains a settlement and release only on his or her own behalf, the fair share calculation is based on the total amount of the outstanding obligation” (¶ 33). Although Smith paid much more than Kleynerman, his payment was less than one-half the total amount of the obligation. As a matter of law, then, Smith did not pay more than his fair share (see ¶ 36).

The court remanded the matter for a determination regarding Smith’s contribution claim for payment of attorney fees.

Municipal Law

Annexation – Challenge to Validity of Annexation Ordinance – Statute of Limitation – Intervening Parties

Town of Burnside v. City of Independence, 2016 WI App 94 (filed 29 Nov. 2016) (ordered published 21 Dec. 2016)

HOLDING: The town of Arcadia’s claims challenging an annexation ordinance, which were brought through intervention in a suit filed by the towns of Burnside and Lincoln, were time barred by the applicable statute of limitation.

SUMMARY: The town of Arcadia appealed an order dismissing its claims against the city of Independence. Independence passed three annexation ordinances; each ordinance pertained to separate land within the towns of Arcadia, Burnside, and Lincoln. Burnside and Lincoln commenced this action challenging the validity of the annexation ordinances; they later stipulated to the dismissal of their claims against Independence. Arcadia then sought to take up those towns’ claims, and it successfully intervened in the Lincoln-Burnside action. However, the circuit court later granted Independence’s motion to dismiss Arcadia’s claims, concluding they were untimely.

In a decision authored by Judge Hruz, the court of appeals affirmed. It agreed with the circuit court “that Arcadia’s claims brought through its intervention came too late. Wisconsin Stat. §§ 66.0217(11)(a) and 893.73(2)(b) establish a ninety-day limitations period for actions challenging the validity of an annexation. In this case, Independence adopted the annexation ordinances on August 19, 2014, but Arcadia did not seek to intervene and bring its claims in the Burnside/Lincoln action until April 30, 2015” (¶ 2).

The appellate court rejected Arcadia’s argument that as long as someone commences an action within the applicable limitation period, additional parties may be added to the litigation through amendment or intervention without regard to the limitation period’s expiration. “Arcadia does not cite any authority supporting the proposition that, from either a plain-meaning or legislative-intent standpoint, one party’s ‘action’ challenging an annexation under Wis. Stat. §§ 66.0217(11)(a) and 893.73(2)(b) permits another party to untimely assert its own claims challenging the annexation” (¶ 17).

Arcadia further claimed that the circuit court erred by failing to apply the relation-back doctrine, codified in Wis. Stat. section 802.09(3). It contended that relation-back principles are relevant to its argument that the 90-day statute of limitation was tolled under Wis. Stat. section 893.13(2), which provides in pertinent part that “[a] law limiting the time for commencement of an action is tolled by the commencement of the action to enforce the cause of action to which the period of limitation applies.” Arcadia argued that this statute renders its claims timely because they arose from a single cause of action and involved the same grouping of facts as the claims Burnside and Lincoln advanced.

The court of appeals disagreed. “The fundamental flaw in Arcadia’s argument is that its claims challenging the validity of the annexation are not a ‘constituent part’ of either Burnside’s or Lincoln’s respective claims challenging the annexation. No part of Arcadia’s claims here arose by means of subrogation, derivation or assignment. [See Wis. Stat. § 803.03(2)(a).] Although its claims may be, in some respects, ‘identical’ to those brought by Burnside and Lincoln, that alone is insufficient to render Arcadia’s claims timely” (¶ 31).

“Only a person having one of the three ‘constituent parts’ of an original, timely cause of action under [Wis. Stat. section] 803.03(2)(a) (i.e. subrogation, derivation or assignment) may successfully intervene in a pending action without regard to the statute of limitations. Arcadia lacks any such interest here” (¶ 36).

In sum, “[i]t is undisputed Independence passed three annexation ordinances, only one of which pertained to Arcadia. If Arcadia believed the ordinance pertaining to the annexation of its territory was invalid, it had a powerful incentive to join the Burnside/Lincoln litigation in a timely fashion. Yet it did not do so, perhaps under the belief that it could rely upon Burnside and Lincoln to effectively litigate its position in absentia. Even if that was not Arcadia’s belief or reasoning here, acceding to Arcadia’s argument would effectively approve such a ‘piggy-backing’ approach for all similarly situated parties in the future. To the extent the Burnside/Lincoln challenge implicated the validity of the annexation ordinance pertaining to Arcadia’s territory, the better practice would have been to bring Arcadia into the litigation immediately” (¶ 40).

“However, Burnside and Lincoln were not required to do so. And, as already explained, Arcadia’s claim is not a ‘constituent part’ of Burnside and Lincoln’s causes of action under Wis. Stat. § 803.03(2)(a) such that the statute of limitations was tolled as to Arcadia’s claims by Burnside and Lincoln’s timely action” (id.).

Disciplinary Action Against Police Officers – Discharge from Employment

Vidmar v. Milwaukee City Bd. of Fire Police Comm’rs., 2016 WI App 93 (filed 15 Nov. 2016) (ordered published 21 Dec. 2016)

HOLDING: The Milwaukee City Board of Fire and Police Commissioners proceeded on a correct theory of law in upholding the discharge of a Milwaukee police officer.

SUMMARY: The Milwaukee Police Chief discharged Officer Vidmar from employment for violating three Milwaukee Police Department (MPD) rules and procedures. The chief found that Vidmar failed to obey the laws in effect in Wisconsin, failed to be forthright and candid on an official department report, and lacked the capacity to enforce federal and state laws and city ordinances. The charges related to Vidmar allegedly filing an official MPD report under false pretenses to obtain personal possession of a dirt bike that had been held by the MPD as unclaimed property.

Before Vidmar was discharged, the MPD had received notices from the Milwaukee County District Attorney’s Office, the local U.S. Attorney’s Office, and the Milwaukee City Attorney’s Office that in essence indicated that these offices would no longer be able to use Vidmar as a witness in their cases because of his misconduct.

Vidmar appealed his discharge to the Milwaukee City Board of Fire and Police Commissioners. The board dismissed the charge of failing to obey state laws, reduced the penalty for filing a false police report to a 60-day suspension, and sustained the discharge for lacking the capacity to enforce federal, state, and municipal laws because of Vidmar’s inability to testify as a prosecution witness.

Vidmar pursued both a statutory appeal and certiorari review in the circuit court, which affirmed the board’s decision to discharge him. Among the issues at the court of appeals was whether, as it relates to certiorari review, the board proceeded on a correct theory of law in concluding that Vidmar violated the MPD rule dealing with his capacity to enforce the law.

In a decision authored by Judge Brash, the court of appeals affirmed. It rejected Vidmar’s argument that he can still function as a police officer by working on administrative duties. The board concluded that “‘enforcing the law’ really implies working in the field – patrol, investigation, arrests, and the like” and that Vidmar’s inability to testify rendered him unable, as a practical matter, to enforce the law” (¶ 19) (internal quotations omitted).

The appellate court agreed with the board that the capacity to enforce the laws means the capacity to engage in the full spectrum of responsibilities that an officer may be called on to undertake. “One of the most crucial of those responsibilities is giving testimony in court that is worthy of belief. If an officer’s capacity to work in the field, which includes giving credible testimony in court, has been permanently compromised – as is the case here with Vidmar – then his ability to engage in the full spectrum of the responsibilities of a police officer has also been compromised. In such a scenario, the officer does not have the capacity to enforce the laws. Accordingly, we conclude that the Board proceeded on a correct theory of law in concluding that Vidmar violated [the] charge [alleging that he lacked the capacity to enforce the law]” (¶ 20).

Real Property

Public Trust Doctrine – Docks

Movrich v. Lobermeier, 2016 WI App 90 (filed 29 Nov. 2016) (ordered published 21 Dec. 2016)

HOLDING: The public trust doctrine permitted property owners to install a dock resting on the waterbed of a flowage.

SUMMARY: Two sets of waterfront-property owners, the Lobermeiers and the Movriches, an estranged brother and sister together with their respective spouses, sparred over their rights with respect to a flowage in Price County. The flowage was formed long ago when the town dammed the creek. The Lobermeiers owned only submerged property in the flowage, part of which abutted the Movriches’ upland waterfront property. At a bench trial, the judge ruled that the public trust doctrine permitted the Movriches to install a dock that extends from their property and rests on the waterbed. The Lobermeiers appealed.

The court of appeals affirmed in an opinion authored by Judge Curley. The opinion thoroughly canvasses the public trust doctrine as it applies to lakes, streams, and the rights of riparian owners (see ¶ 20). The parties agreed that the public trust doctrine applied to the flowage, which in turn gave the public (the Movriches included) the right to enjoy its waters (see ¶ 25).

In finding “untenable” the Lobermeiers’ argument that the Movriches could not access the flowage waters from their property, the court distinguished Mayer v. Grueber, 29 Wis. 2d 168, 138 N.W.2d 197 (1965), which concerned a privately owned lake (a former gravel quarry). “[B]ecause the Movriches are members of the public who also happen to be riparian property owners, the public trust doctrine grants them the right to access the Flowage directly from their property and the right to erect, maintain, and use a pier or dock extending from their property into the Flowage” (¶ 31).

First, it was undisputed that the flowage was formed by a dammed navigable river. Second, the public trust doctrine permits the public to use and enjoy such waters (see ¶ 33). Third, docks and piers “typically aid navigation,” a benefit promoted by the public trust doctrine (see ¶ 34). In sum, the court’s holding rested on reconciling riparian and property rights in light of the public trust doctrine (see ¶ 35).

Torts

Recreational Immunity – “Occupiers”

Westmas v. Selective Ins. Co., 2016 WI App 92 (filed 9 Nov. 2016) (ordered published 21 Dec. 2016)

HOLDING: A tree-cutting service could not claim recreational immunity.

SUMMARY: While walking with her son on the grounds of a conference center, Jane Westmas was killed by a branch cut from a tree by Creekside, a tree-trimming service hired by the center. The circuit court granted Creekside’s motion to dismiss the plaintiffs’ negligence claims on grounds of recreational immunity.

The court of appeals reversed in an opinion authored by Judge Gundrum. Creekside was neither an “agent” nor an “occupier” of the center; thus, it was not entitled to recreational immunity (¶ 14).
 Although the center contracted with Creekside for certain work to be done within the center’s budget, Creekside was not an “agent” within the meaning of Wis. Stat. section 895.52 (the recreational immunity statute) (see ¶ 21). The record showed that Creekside controlled the details of its work, including the cutting that killed Jane Westmas.

Nor did Creekside “occupy” the property within the meaning of the statute and case law, which requires a “degree of permanence, as opposed to mere use” (¶ 24). Recreational immunity is not granted to third parties who are not responsible for opening up the land to the public (see ¶ 25). Creekside’s presence on the property never exceeded “mere use.” It had no authority to open the land to the public (¶ 27).

Statute of Limitation – Intentional Trespass to Land

Munger v. Seehafer, 2016 WI App 89 (filed 29 Nov. 2016) (ordered published 21 Dec. 2016)

HOLDING: The statute of limitation codified in Wis. Stat. section 893.57 applies to the tort of intentional trespass to land.

SUMMARY: This lawsuit involved multiple claims against the defendants, including one for intentional trespass to land. Among the issues on appeal was whether the limitation period codified in Wis. Stat. section 893.52 (titled “Action for damages for injury to property”) or the limitation period codified in Wis. Stat. section 893.57 (the statute of limitation governing actions to recover damages for libel, slander, assault, battery, invasion of privacy, false imprisonment, or other intentional tort to the person) applies to the tort of intentional trespass to land. No published Wisconsin case appears to have considered whether allegations of intentional trespass are governed by section 893.52 or by section 893.57 (see ¶ 19).

In a decision authored by Judge Hruz, the court of appeals held that Wis. Stat. section 893.57 applies to the tort of intentional trespass to land. “[W]e conclude the statute of limitations governing intentional torts, Wis. Stat. § 893.57, is applicable to claims for intentional trespass. In so holding, we necessarily conclude that the limitations period contained in Wis. Stat. § 893.52 does not apply to a claim for intentional trespass, as such a claim need not entail ‘injury to real property’ within the meaning of [Wis. Stat. section 893.52]” (¶ 29).

A cause of action for intentional trespass exists even in the absence of physical damage or injury to the property trespassed upon. “The true ‘injury’ produced by an intentional trespass is the violation of the possessor’s right to exclude others, even if there are, in some instances, other damages that flow from the trespass. A person may seek compensatory damages for such injuries as a remedy for trespass, but such damages are not essential to the cause of action. Importantly, the allegedly injured party may bring an independent claim for property damage occurring during the trespass [as the plaintiffs did in this case in one of their other claims]. Because the existence of damages for injury to real property is not necessary to maintain a claim for intentional trespass, Wis. Stat. § 893.52(1) cannot govern [the plaintiff’s] intentional trespass claim” (¶ 25).

The court rejected the plaintiff’s argument that the limitation period of Wis. Stat. section 893.57 cannot apply to the intentional trespass to land claim because the statute speaks of an “intentional tort to the person” (emphasis added). Said the court, “[i]ntentional trespass is a personal tort. It is an offense against another’s possession, including the person’s right to exclude others from his or her real property and the corresponding feeling of security the person may achieve in doing so” (¶ 27) (citation omitted).